Sweden’s economy contracted in the first quarter of this year. In addition, the Scandinavian country notices that inflation is beginning to gnaw on the purchasing power of Swedes.
In addition, consumer sentiment is less due to the war in Ukraine. According to preliminary data from the Swedish Statistical Office, the gross domestic product fell 0.4 percent in the first quarter from the previous three months.
Swedish consumers have faced the most significant price increases in more than three decades. High inflation has also led to a shift in central bank policy. The Riksbank has abandoned its plans to keep the key rate at zero until 2024 and raised it to 0.25 percent. As a result, it is the first time since 2014 that Swedish interest rates are above zero again.
After a surprisingly strong recovery in 2021, a growth slowdown was expected at the beginning of this year. This was partly due to a new wave of corona infections. In addition, there are global supply chain restrictions. Higher prices also dampened growth.